An oil platform exploded and burned off the Louisiana coast Thursday. Last year a story like this would not have made national news, however, following on the heels of the BP Deepwater Horizion disaster people are taking notice. Above is a video of Press Secretary Robert Gibbs explaining the details of the newest gulf coast oil explosion. Thankfully, this incident had a substantially different outcome than the BP Gulf Coast disaster. All the rig workers escaped alive and there is no new oil spill.
BP will pay a record $50.6 Million OSHA fine for numerous safety violations discovered at a Texas City oil refinery last year. The prior record for an OSHA fine, $21 Million, was also issued against BP for multiple safety violations at the exact same Texas City refinery a few years earlier. OSHA issued the previous record holding fine following a deadly explosion at the BP refinery, in March of 2005, that killed 15 people and injured 170. To say BP did not learn it’s lesson following the tragic 2005 explosion is an understatement.
Specifically, in this most recent round of fines, OSHA issued the BP Texas City refinery 709 citations with a total fine exceeding $80 Million, finding the exact same safety problems at the refinery BP was punished for in 2005. Labor Secretary Hilda Solis stated “The size of the penalty rightly reflects BP’s disregard for workplace safety.” BP accepted 270 violations and agreed to pay $50.6 Million, but is still contesting over 400 of the citations.
Jordan Barab, the deputy director of OSHA, when asked whether BP admitted wrongdoing at the Texas City refinery he said “They have recognized and accepted every citation that we have levied on them” related to their failure to correct violations stemming from the 2005 settlement, “That speaks for itself.”
The U.S. Judicial Panel on Multidistrict Litigation ruled that more than 300 cases filed against BP will be heard by U.S. District Court Judge Carl Barbier in New Orleans. The lawsuits include multiple wrongful death claims filed by the families of those killed in the Deepwater Horizon oil rig explosion as well as hundreds of claims filed by Gulf Coast Businesses seeking economic losses.
The Multidistrict panel’s decision is viewed as a huge blow to BP’s defense efforts. BP requested that the panel consolidate the cases to the center of it’s U.S. Operations, Houston, Texas. However, the panel chose New Orleans and provided the following reasoning “without discounting the spill’s effects on other states, if there is a geographic and psychological ‘center of gravity’ in this docket, then the Eastern District of Louisiana is closest to it.”
As previously discussed in this blog, the Death on the High Seas Act (DOHSA), Oil Polution Act (OPA), and the Limitation of Liability Act (LOLA) protect companies like BP from liability when disasters such as the Gulf Coast Oil Spill occur. However, it appears government and public pressure may prevent BP from hiding behind these maritime immunity statutes. The above video is footage from Thursday’s Congressional Hearing on the oil spill. With many calling for a complete boycott of BP, Lamar McKay, Chairman and President of BP America, stated BP will pay all legitimate claims.
Potentially, this is good news for the fishermen, shrimpers, hotels and restaurants damaged by this disaster. Affected small business now must fight over the value of their claims, but if BP keeps it’s word, at least these businesses will not have to worry about capped damages completely precluding their claims. Hopefully, government, media, and public pressure will continue to ensure BP keeps it’s promise to pay for the harms it caused.
It has been revealed through recent Congressional hearings that BP ignored warning signs and continued to drill just hours before the oil rig, Deepwater Horizon, exploded killing 11 people and causing an environmental catastrophe of historic proportions. BP has admitted fault, but BP executives testified that Transocean (the offshore drilling contractor) shares responsibility because the Blow Out Preventer, or BOP, failed to operate. Transocean, while acknowledging the failure of the BOP, has pointed the finger at Haliburton for failures in the cementing process. It appears the Gulf Coast Disaster could have been prevented at several different stages and there is plenty of blame to go around.
One victim, twenty-eight-year-old Gordon Jones, died in the explosion leaving his widow, Michelle, to care for their two young sons. The Jones family and the families of the other 10 workers that died are severely limited in their ability to recover damages because of the Death on the High Seas Act (DOHSA). “BP is immune from entirely compensating these families for the horrible way in which their loved ones died and the relationship they have now lost,” said Anthony Tarricone, president of the American Association for Justice. “DOHSA needs to be amended to provide fair remedies to victims of other maritime disasters on the high seas, starting with the 11 brave men who died on the Deepwater Horizion.”
BP and Transocean are further protected by the Oil Pollution Act (OPA) and Limitation of Liability Act (LOLA). While experts estimate the economic damage to the Gulf Coast in the Billions, the OPA caps BP’s liability at $75 million. Additionally, Transocean is seeking to limit it’s liability to $27 million by relying on the Limitation of Liability Act. The law was passed in 1851 to allow ship owners to limit liability to the post-accident value of the vessel and cargo. Transocean has reported the oil rig was worth $650 million before the explosion and is now worth less than $27 million laying sunken on the ocean floor.